The rise in oil prices is due to two converging outcomes, neither of which is planned in a global commodity market. The Saudi’s are still wrangling both OPEC and non-OPEC members to slash 2% of supply so as to build a floor bidding prices higher. This takes time and unrelenting effort which the Saudi ministry portfolio has, for now. The second factor is U.S. shale frackers are poised to finally begin earning revenue. Both coincide to producer higher oil prices. But there remain caveats. Lets examine them.

Crude has surged 40% in six months. Fracking wildcats have decided to limit spending while performing operations. This is new because U.S. industries have used both private equity and the stock market to finance their operations on credit. Historically, higher oil prices in North America meant one thing: drill. With 24 hour news cycles abound, U.S. shale producers are limiting spending and enjoying profits. Both the U.S. Energy Information Administration and the Paris based International Energy Agency reveal that America has overtaken Saudi Arabia as the world’s highest output in petroleum.

So where does the money go?

Most fracking companies need to pay off debt, fatten dividends or sustain intensive buy-back shares to sustain a balanced fisc.

Last week, U.S. Brent crude topped $65, the highest level since 2014. Since the boom began, U.S. shale fracking companies have spent $265 billion more than they generated from operations beginning in 2010, so its fitting that revenue flow towards lower costs, better balance sheets and more secure management teams.

As the Saudi’s begin to panic about wrangling in OPEC members to produce a 2% annual cut in production, they need to remember this: the American market in petroleum needs a 6-9 month lag time from drilling a well to output. U.S. fracking companies have nearly 7,000 wells that have been drilled but not fracked. This 30% gross output gap can easily be put on line to envelop OPEC. Near Eastern regimes remain worried now because their own regimes have turned inward to address both social and geopolitical worries.

So what’s the Saudi calculus?

Saudi Arabia’s chief oil official is Khalid al-Falih, and he want to cut 1.8 million barrels a day to instill confidence for longterm investments in expensive international projects. Riyadh notes that the balance between supply and demand still favors the American’s. The Saudi threat is domestic, monetary and fiscal. They need to procure profound monetary velocity in their domestic economies favoring consumption. To do this, they need massive foreign direct investment, domestic comity, high oil dollar denominated output and a deep cooperative agreement from OPEC to sustain annual cuts.